Despite legal protests from conservation groups, the Bureau of Land Management is auctioning off 195,732 acres (304 square miles) of public lands in Nevada today for fossil fuel development. The BLM dismissed the protests on Tuesday, ignoring or downplaying legal and environmental concerns about fracking impacts to public lands, surface and groundwater, wildlife and the climate.
Today, the U.S.
The Israeli authorities’ latest decision to slash the electricity supply to the Gaza Strip could have catastrophic humanitarian consequences for residents who have already endured a decade of suffering under Israel’s brutal blockade, Amnesty International has warned.
The Israeli authorities’ latest decision to slash the electricity supply to the Gaza Strip could have catastrophic humanitarian consequences for residents who have already endured a decade of suffering under Israel’s brutal blockade, Amnesty International has warned.
The decision by the Federal Open Market Committee (FOMC) today to raise interest rates for the third time in six months is a clear mistake, even judged against the Fed’s too-conservative 2 percent inflation target.
New Poll: Americans Believe Bayer-Monsanto Merger Poses Serious Threats to Jobs, Independent Farmers, and Food Safety
A recently released poll shows that 9 in 10 Americans have serious concerns about the potential merger of major agrochemical companies Bayer AG and Monsanto. In a new Public Policy Polling (PPP) poll of 1,506 registered voters, Americans expressed overwhelmingly negative thoughts about the merger’s impacts on jobs, food safety, and independent farmers. The merger of Bayer and Monsanto is currently under review by the U.S.
The International Monetary Fund, Eurozone Finance Ministers and Greek officials meet Thursday in Luxembourg to negotiate financing and further debt restructuring for Greece.
Eric LeCompte, Executive Director of the religious development group Jubilee USA, releases the following statement:
"It's time to deal with Greece's debt now. Greece won't see sustainable economic growth unless it receives significant debt relief. We can't keep kicking the can down the road.
Public Citizen Applauds Lawmakers’ Lawsuit to Enforce the Emoluments Clause of the U.S. Constitution
Public Citizen supports the lawsuit filed today against President Donald Trump by nearly 200 members of Congress accusing him of violating the Emoluments Clause of the U.S. Constitution. The lawsuit – the third such suit filed – is designed to compel the president to stop violating the important constitutional provision that prohibits government officials from receiving payments from foreign governments without the consent of Congress.
The Financial Times reports that European energy giant INEOS announced plans to build a new petrochemical plant that uses fracked gas from the United States as a feedstock for producing propylene, a raw material used in making plastics. The company relies on its new fleet of "dragon ships" to act as a virtual pipeline, shipping gas liquids across the Atlantic Ocean.
In response, Food & Water Watch executive director Wenonah Hauter issued the following statement:
UK's general election did not immediately result in a Labour government, but it did represent a victory for an alternative to the neoliberal policies that have dominated British politics for two decades. In the face of media scorn, Jeremy Corbyn has energized sections of the British public ignored by and disillusioned with the major parties, and exorcized the ghosts of Blairism.
Jeremy Corbyn campaigns in West Kirby, England, May 20, 2017. (Photo: Andy Miah)
In 1997, I voted for the first time in a British general election, and voted Labour. I was woken up on the morning of May 2 by a knock on the door of my room at college and the amazing news that the Conservatives were out. The "nasty party," the party of Margaret Thatcher and the Poll Tax and an endless shower of racist homophobes, was out after almost two decades in power.
Any lingering doubts about "New" Labour's shift to the center -- and about the fact that Tony Blair, the new prime minister, seemed like the kind of man who'd say anything to win -- were quieted by the fact that I was 19 and not particularly politically educated. The sun was shining and the Tories were out. Labour's campaign theme song, "Things Can Only Get Better" by the Northern Irish pop group D:Ream, seemed to have come true. We'd done it.
Things Can Only Lurch Rightward?
One could fill a whole series of articles chronicling the ways in which Labour under Blair failed the promise of that day in 1997: abolishing grants for higher education and replacing them with loans while introducing tuition fees, stealthily chipping away at the National Health Service and other public services through public-private partnerships, giving us home secretaries who shamelessly pushed anti-immigration and "tough on crime" rhetoric. But the invasions of Afghanistan and Iraq, and the UK's willing participation in the entire "war on terror," remain Blair's bloodiest and most bitter legacy.
To ensure re-election, Labour ran on a platform of triangulation and fear: their strongest message was essentially "You don't want the party of Thatcher to get back in, do you?" -- or literally, "Be afraid" -- while they drifted closer and closer to Conservative policy and rhetoric. This strategy may sound familiar to people in the US.
It had dismal results: after a huge jump in 1997, Labour's share of the vote plummeted in every election while Blair or his successor Gordon Brown were in office (overall voter turnout also hit an all-time low in 2001). Once out of power, Labour continued a version of this approach under Ed Miliband (the party's leader from 2010-2015), selling a mug that boasted of promising "controls on immigration." Jeremy Corbyn's close ally and first choice for shadow home secretary, Diane Abbott (who was also vilified and then vindicated in this year's election) rightly described this opportunistic concession to xenophobia as shameful.
A New Hope
Fast forward to today, and the results of this year's general election -- while not resulting in a Labour government, as yet -- now seem to shine more brightly than Labour's actual win 20 years ago.
That victory became impossibly tarnished by the realities of Blairism and the extent to which the United Kingdom appeared to become a place in which there was truly no alternative to neoliberalism, austerity and complicity in US imperialism. Despite being less of a two-party system than the United States, all the major parties seemed to share one extremely limited set of values. When the Liberal Democrats cut a jaw-droppingly cynical coalition deal that ousted Labour and returned the Conservatives to power in 2010, the UK's political future seemed as grim as it ever has in my lifetime. The National Health Service would be dismantled and sold off. London would become nothing but a playground for the incredibly wealthy. And the poor, not to mention the elderly and the disabled, would be deemed disposable with a speed that would make Paul Ryan blush.
In this context, and in the light of last week's results, the memes, cartoons and street art depicting Jeremy Corbyn as Obi-Wan Kenobi seem less silly. Corbyn's ability to rebuild the Labour Party simultaneously as an electoral force and a left-wing one has indeed provided a new hope, one that resonates beyond the UK at a moment when the political contest in Europe and the United States has otherwise appeared to largely be between an increasingly discredited neoliberal centrism and an ascendant far right.
The Many, Not the Few
It is a very good idea to try, if at all possible, to resist the temptation to feel too much personal affection for political leaders and to avoid the trap of thinking that they are your close personal friends or family members. It's a phenomenon that seems to invariably lead to a distorted view of their policies. Barack Obama and Justin Trudeau were never our super-progressive boyfriends, Joe Biden was never our cool uncle, Hillary Clinton is not our sister or mom, Bernie Sanders was not and is still not our communist grandpa.
Jeremy Corbyn is not perfect, and there have been moments I've doubted him -- his decision to counter May on "public safety" by promising to hire more police officers, an uncharacteristic moment of triangulation, being the most recent example. Nevertheless, he's made it more difficult for me to stick to the principle of not feeling affection toward a political leader.
In part, this is because Corbyn has been very quick to redirect credit to the party members, grassroots organizers and voters who have propelled him to where he is today by pounding the pavement and door-knocking while also using social media smartly and thriftily. His campaign's advertising reflected this -- from the tagline "For the many, not the few" to a final social media video that featured no words, just music over shots of some of those "many," with Corbyn himself interspersed relatively rarely.
Like other aspects of Corbyn's success, this is slightly less unusual in the UK than it would be in the US. The political contexts of the UK and US are different to a degree that most analyses, thrilled by the similarities which do exist between Corbyn and Bernie Sanders, tend to overlook. The British prime minister is a public servant and the leader of the party in government, not the "commander in chief," and less venerated than an American president -- a silver-lining benefit of still having a monarch as ceremonial head of state.
Make no mistake, however, it still bucks the trend for a supposedly uncharismatic grey-bearded veteran of the Labour rank and file to become so popular, especially among young Brits. Corbyn's age, his clothes, his soft-spoken manner, his apparent lack of focus-grouped polish and his hobby of what people in the US would call community gardening -- all of these things may seem iconic to his supporters now, but all of them were thoroughly pilloried for a time and presented as evidence that he was an unelectable relic.
"Scorn and Ridicule"
Then there was the media reaction to Corbyn's politics. Any left-leaning candidate in the UK has slightly more room to question nationalism, militarism and the precepts of the free market than one can imagine in the US. Yet it is undeniable that Corbyn has pushed against even those slightly wider limits -- and achieved electoral results to an extent no one thought possible -- in the face of a backlash from the media and the political class that would do DC proud.
Don't take my word for it. A report by the Department of Media and Communications at the London School of Economics and Political Science, published in July 2016, found the following (emphasis mine):
… Jeremy Corbyn was represented unfairly by the British press through a process of vilification that went well beyond the normal limits of fair debate and disagreement in a democracy. Corbyn was often denied his own voice in the reporting on him and sources that were anti-Corbyn tended to outweigh those that support him and his positions. He was also systematically treated with scorn and ridicule in both the broadsheet and tabloid press in a way that no other political leader is or has been. Even more problematic, the British press has repeatedly associated Corbyn with terrorism and positioned him as a friend of the enemies of the UK. The result has been a failure to give the newspaper-reading public a fair opportunity to form their own judgments about the leader of the country's main opposition.
In the subsequent year, this attitude barely relented, and in some quarters, it intensified. The same report noted, "The degree of positive exposure in the left-wing and centrist press is a bit higher, but it would be fair to say that also there the support for Jeremy Corbyn is at best lukewarm."
There is not space here to detail the failings of the British media in full, especially the public and left-leaning outlets from which one might have expected better. Suffice to say, the approach of some liberal and center-left columnists was to take a tone "more in sorrow than in anger," a pseudo-pragmatism with which US readers of similar publications will be familiar, in which they sadly bemoaned that there was no way Labour under Corbyn could achieve electoral success, no matter how much they might like it to be true.
Many of the center-left and liberal media professionals who did this are already walking it back, in some form or another. Some have made what appear to be good faith apologies, while others have made dishonest remarks ("shameful how the right-wing press tried to smear him!"). Some have even treated us to the unlikely but satisfying spectacle of eating a page of their own words on TV. The Blairites and others within the Parliamentary Labour Party who spoke against Corbyn in the media, challenged his leadership and generally worked to undermine him find themselves in a similar position. (Judging by the standing ovation Corbyn received on his return to the House of Commons this week, most of them now want to be on the winning side of history.)
The right-wing media, of course, did go all in. The Sun, the tabloid that famously supported Labour in 1997 as owner Rupert Murdoch and Tony Blair began an ill-fated friendship, declared: "There is nothing more important for Sun readers' jobs and futures than keeping Jeremy Corbyn out of [the office of Prime Minister]," with a cover that helpfully recapped all their past smears in one hyperbolic list. Those smears, however, weren't enough to stop almost a third of Sun readers from voting for him.
"As Good as Mainstream UK Politics Will Allow"
The data from the election is still being deconstructed and debated, but there is some evidence that it is not quite so simple as to declare that all young people were Corbyn's most energized new base. It was Black and other non-white Britons who turned out in higher numbers, according to an analysis by Paula Surridge, a political sociologist at University of Bristol:
… the more ethnically diverse areas had a higher increase in turnout than less diverse areas…. This suggests the narrative about turnout change in 2017 is more complex than just getting out the 'young' vote. It suggests turnout rose most where the population was ethnically diverse.
What made Corbyn so popular with young British voters of color? It wasn't just his economic policies -- it was also the fact that he'd put in the work. Let's not forget that Tony Blair ended his time as prime minister by explicitly blaming Black "culture," not poverty, for violence, a piece of blatant anti-Blackness. Black and Muslim British communities surely needed to see the ghosts of Blairism exorcised as much as anyone, and Corbyn, who is open to the idea of investigating Blair for war crimes, represents the first leader who offers that.
The #Grime4Corbyn movement was yet another group that turned out to have the last laugh at the expense of more "qualified" media pundits. Akala, one of several Black British musicians to throw their weight behind Corbyn, explained his view of Corbyn thus:
I'm from North London (his area) & ppl in the black book store in the hood actually know him for last 20 years … Cos he goes there. Also said public (to an audience with very few black folk to impress) that Walter Rodney is his favourite book. Acknowledges Britain's 'problematic' imperial history/legacy. Basically as good as…. mainstream UK politics will allow. For a potential prime minister to even know where the black book shop is is just weird, let alone 2 know Rodney…
The involvement of young Black musicians included providing the basic information that the UK's media institutions did not. For example, rapper JME collated all the party manifestos "in one place for us lot to check out." This wouldn't have been such a huge boon for Labour if their manifesto hadn't been proved so popular.
What was popular about the manifesto? It pledged to renationalize the energy industry, railways, buses and postal service; to scrap those aforementioned tuition fees; to boost workers' rights and undo many benefits cuts. It ditched the idea of reducing immigration numbers, explicitly criticized the idea of setting immigration targets, and promised to remove the income thresholds for immigrants' spouses. In the area of foreign policy, it may not have gone as far as close observers of Corbyn's personal foreign policy stances may have hoped (or in the case of the tabloids, feared) but it nevertheless promised a U-turn, including ending arms sales to Saudi Arabia.
"Labour's manifesto inspired me like nothing else," a student in Nottingham told the Independent. "This election was our chance to take back control of our futures."
What Happens Next?
For now, Theresa May is clinging to power, with a looming deal with Northern Ireland's hard-right, paramilitary-linked Democratic Unionist party (DUP) that not only makes a mockery of the idea that the Conservatives are no longer the party of regressive homophobia, misogyny and racism -- not that the Tories need the DUP for that -- but could also threaten peace in Northern Ireland itself. There is a dark irony in that, following a Brexit result that was powered in part by dreams of British nationalism, and in response to a Labour party now led by the closest thing to an anti-nationalist, anti-colonial leader British politics has seen in a long, long time, May has resorted to trying to cut a deal with what British music writer Tom Ewing aptly describes as "the fanatical residue of Britain's original colonising sin."
But the consensus, which was for so long set against Jeremy Corbyn in spite of any countervailing evidence, is now clear: May's days are numbered. Corbyn is vindicated, and his party's membership has surged. The next election is Labour's to win -- and it is highly likely that it will be won on a platform that challenges the ideological assumptions that have governed British politics for two decades. There is, after all, an alternative. No wonder the capitalists are terrified.
The Senate is slated to vote today on whether to impose a spate of new sanctions against Russia over allegations of Russian meddling in the 2016 US election. The vote comes only one day after the much-anticipated testimony of Attorney General Jeff Sessions before the Senate Intelligence Committee. For more, we speak to three-time Academy Award-winning filmmaker Oliver Stone about his new TV special, "The Putin Interviews," which is airing on Showtime this week. The series is based on more than 20 hours of interviews Stone conducted with Russian President Vladimir Putin over the past two years.
Please check back later for full transcript.
Jeff Sessions Said "I Don't Remember" or "I Don't Recall" 26 Times During Senate Intelligence Testimony
Attorney General Jeff Sessions has come under fire for repeatedly refusing to answer questions during his testimony Tuesday before the Senate Intelligence Committee about alleged Russia meddling in the 2016 election. We air highlights and speak to Elizabeth Goitein, co-director of the Liberty and National Security Program at the Brennan Center for Justice.
Please check back later for full transcript.
A National Improved Medicare for All would prioritize people's health and well-being over corporate profits. Even as Republican senators seek to dismantle the Affordable Care Act, the single-payer health care plan envisioned in Rep. John Conyers' bill, HR 676, is receiving more support than any previous universal health care effort.
Activists display signs in the Healthcare Justice March in Baltimore, Maryland, October 26, 2013. (Photo: United Workers)
This piece is part of Fighting for Our Lives: The Movement for Medicare for All, a Truthout original series.
As Republicans come under pressure from the White House to complete the process of repealing and replacing the Affordable Care Act (ACA) so they can move on to other priorities, they are finding that this is one campaign promise that is very difficult to keep. The House version of their American Health Care Act (AHCA) has been so heavily criticized that even President Trump says it is too harsh. Republican Senators are currently negotiating their version in secret to avoid too much scrutiny. So far, the Republicans are far from reaching consensus on how to proceed. The people of the United States, on the other hand, are clear on the solution to the health care crisis that they support and are organizing from coast to coast to make it a reality.
The public demand for a National Improved Medicare for All single-payer health care system in the United States is stronger than it has been in decades. The failures of the ACA to cover everyone and control rising health care costs, combined with the threat of the AHCA, which would add at least 23 million more people to the 29 million currently uninsured and further erode the quality of health insurance, have made it clear that we can't continue with the current health care system. This brings to mind a quote by Winston Churchill: "You can always count on Americans to do the right thing -- after they've tried everything else."
All other industrialized nations have some form of publicly funded universal health care system. Many of them are national insurance systems like our Medicare. Some, like the systems in Canada and Taiwan, are actually modeled on US Medicare. Most of them spend half as much on health care (per person per year) as the United States, and they have better health outcomes. No country has adopted a universal health care system and then gone back to its previous system. They have learned that when a system is universal, it is of higher quality precisely because every person has a stake in making it the best it can be.
People from across the political spectrum are expressing support for a single-payer health care system in the US, from conservatives like Charles Krauthammer to business leaders, such as Warren Buffett and Charlie Munger, to Senator Bernie Sanders. Given the failure of commercial media to cover single payer fairly, if at all, and given many Democrats' attempts to obfuscate it with a public option, there is confusion about exactly what a national improved Medicare for All system is and what it isn't. So, here is a primer on the basics of the single-payer health care system envisioned in Rep. John Conyers' bill, HR 676: The Expanded and Improved Medicare for All Act, which now has more cosponsors than ever before.
National Improved Medicare for All
National Improved Medicare for All (NIMA) is a universal publicly financed health care system. Here are the core elements:
1. National: Every person living in the United States and its territories -- including every health professional -- is in the system. No matter where people travel domestically, they are in the system. No one has to worry about going "out of network" because it is one giant network. This also means that if there is a medical center that specializes in a particular condition, patients can go there if they need to -- no matter where they live.
Including everyone in one giant risk pool spreads the risk widely so that no particular state is burdened more heavily than others with covering the cost of care for its residents. In the US, 20 percent of the population has high health needs, using 80 percent of our health care dollars. Fifty percent of the population is healthy, using only 3 percent of our health care dollars. However, any of us can become one of those in the top 20 percent if we have a serious accident or illness. Having a national system gives us the security of knowing that it is there for us when and if we need it. And including everyone increases the likelihood of preventing and controlling epidemics of infectious diseases.
2. Improved: This plan is an improvement over Medicare -- not simply an expansion of our current Medicare system. First, it is more comprehensive than current Medicare and includes all medically necessary care, such as mental health, dental, vision, hearing, rehabilitative and long-term care, medications and medical devices. Current Medicare excludes long-term care, so seniors are forced to spend down their assets before they qualify under Medicaid for long-term care. That would no longer be the case under National Improved Medicare for All. Moreover, the question of what is "medically necessary care" would be answered by patients and their health professionals without interference from health insurers who are more concerned with profits than the health of their enrollees.
Second, because the improved Medicare for All plan is comprehensive, supplemental health insurance would not be necessary, and would not be permitted to duplicate what is covered by the health care system. This is important for maintaining a high standard of quality: There should not be a private system for the wealthy and a public system for the rest of us.
One of the reasons that our current health care system is so expensive is because there are hundreds of different insurance plans with different rules and networks. This makes our current system heavily bureaucratic. Some hospitals have more billing agents than nurses, and physician offices spend more than 10 percent of their overhead dealing with our complex system. The US spends a third of its health care dollars on administration while other countries spend less than half of that, and traditional Medicare spends less than 5 percent on administration. Those dollars that are being wasted on paperwork could go to health care instead.
Moreover, our heavily bureaucratic system also takes our physicians' time and attention away from patient care. A Harvard study published last fall in the Annals of Internal Medicine found that for every hour of direct patient care, physicians spend two hours on paperwork. NIMA means there would be one system with one set of transparent rules, making it simpler for patients and health professionals alike.
Third, because of the savings inherent in a National Improved Medicare for All health system, out-of-pocket costs, such as co-pays and deductibles, would not be necessary. When people need health care, it would no longer be a financial decision; they would be able to seek care. Currently, more than half of insured people with moderate to low incomes are unable to afford their deductibles, and 2 out of 5 report delaying necessary care because of the cost. Every year hundreds of thousands of families declare personal bankruptcy because of medical illness; almost 80 percent of them had some form of health insurance.
There is an idea promoted by people who believe that health care belongs in the market that patients need to pay out of pocket before receiving health care. They call it "skin in the game" and say that it makes patients better "consumers" of health care. In reality, studies have demonstrated that out-of-pocket costs cause people to delay or avoid medically necessary care, leading their ailments to worsen and require more expensive treatment. Most people, no matter what their educational background, are not able to reliably determine which symptoms are important and which aren't; therefore, they are as likely to delay necessary care as they are to delay unnecessary care.
3. Medicare for All: NIMA is similar to traditional Medicare in that it is financed up front through taxes. Supporters strongly recommend a progressive tax because the US has a low ranking globally when it comes to fairness in health care financing. People at the lower end of the income spectrum pay a larger proportion of their income on health care than those at the top. Paying for health care through a tax makes the cost more predictable for families and businesses. It would replace the cost of health insurance premiums, co-pays and deductibles, saving money for 95 percent of the population.
However, instead of being only for people who are 65 years of age and older or for people who have disabilities, National Improved Medicare for All would cover everyone from birth to death. Under NIMA, when people enter a health facility, the first question they're asked is not, "What insurance do you have?" It is "Why are you here?" Those who do not have a national insurance card are presumed to be covered. Care is given first, and registration in the system comes later.
A single-payer system operates on the assumption that all people should be able to easily access the care they need, regardless of their wealth or income.
We Don't Have a Health Care System
One of the first concerns that people have when they hear about National Improved Medicare for All is that it would be too expensive to cover everyone with comprehensive benefits. The reality is that it is too expensive to continue with the system we have now.
The current system was never designed to be an actual health system; it is an accident of history. After World War II, employers were not allowed to raise wages, so they offered benefits, including health insurance, to employees instead. Tying health insurance to employment has proved problematic because when employees become very sick and can't work, they risk losing their job and health insurance. This connection also prevents people from retiring before they reach Medicare age. And the cost of health insurance is the number one concern of small and medium-sized businesses.
Another significant point in history was the Health Maintenance Organization Act of 1973 signed into law by President Nixon. This allowed entities to profit from health care and it unleashed a predatory industry. Private health insurers in the US are financial tools designed to make profits for their investors, making them very different from health insurers in many other nations, which are instead designed to pay for health care. Private insurers in the US make profits by charging the highest premiums they can get away with, shifting as much of the cost of care onto individuals as they can and restricting and denying payment for care. This approach is not compatible with providing high-quality care. In fact, private insurance companies are often obstacles that prevent patients from receiving medically necessary care.
It isn't only the patients who suffer in this system. Health professionals do, too. Physician burnout was one of the top two concerns identified by the Surgeon General last year.
The US's current hodgepodge of a system is the most expensive in the world, with the highest prices for health services and pharmaceuticals. The US isn't even the best, not by far. A recent global health study compared nations on 31 conditions. The US came in 35th with 14 Ds and Fs in critical areas, such as maternal and infant health, certain cancers, chronic conditions, such as Diabetes Mellitus, high blood pressure, heart disease, strokes, kidney disease and adverse reactions to medical treatment. The US has also been found to have high numbers of preventable deaths, estimated at over 100,000 per year, and a decreasing life expectancy.
One of the major strengths of National Improved Medicare for All is that it creates a coherent health care system that sets health for everyone -- not profits for a few -- as the bottom line. In addition to significant administrative savings, estimated at $400 to $700 billion a year, the system can negotiate for fair prices for health services and pharmaceuticals. The system can also engage in better health planning. Instead of rationing people's care based on ability to pay, the system can prioritize and truly address health needs.
No system is perfect. Ask people in countries with universal systems and you will always hear some complaints. But you won't hear about millions of people left without access to care, or families going bankrupt because of an accident or illness, or people delaying necessary care because of the cost. Once the US achieves National Improved Medicare for All, there will still be constant work to do to improve it.
Imagine for a moment the profound meaning of the US adopting a universal health care system. Public policies of the past few decades have overwhelmingly benefited the wealthy. NIMA would put forth a different set of values. It would prioritize people's well-being over corporate profits. It would also communicate that all people deserve the same access to high-quality health care. Previous efforts at universal health care in the US were stymied by racism and classism. A single-payer system would create a sense of social solidarity that has not been experienced in the US. Other countries have figured out that welfare systems are poor systems and universal systems are higher-quality systems, because each person has a stake in making them the best that they can be.
Achieving National Improved Medicare for All will be a profound transformation for the United States. It will empower us to fight for other necessities, such as education, a clean environment, a living income and more. And it is within reach.
(Photo: Maxlkt; Edited: LW / TO)
A new push for a single-payer health system is rising in Washington, where Republicans are pushing a draconian plan to repeal the Affordable Care Act. Some may think that "Medicare for All" would do little for the nation's rapidly growing population of seniors, but a single-payer system could expand benefits and ensure that the process of aging and dying is not exploited for profit.
(Photo: Maxlkt; Edited: LW / TO)
This piece is part of Fighting for Our Lives: The Movement for Medicare for All, a Truthout original series.
Every day about 10,000 people turn 65 in the United States, and the number of people over the age of 85 will more than triple by 2050. As a result, the demand for long-term health care services and end-of-life care will surge in the coming decades, increasing pressure on a system that is already suffering from high costs and workforce shortages. Unless policymakers make serious changes to how we fund and operate the health care system, the process of confronting chronic illness and death in the United States could become increasingly expensive and difficult for everyone but the very wealthy.
This isn't just bad news for the aging baby boomer generation, which is expected to increase the number of people over the age of 65 in the US from 48 million to 88 million by 2050. In the decades to come, many millennials may find themselves navigating the current health care system's complicated mix of government benefits, out-of-pocket costs and private insurance offerings with their elderly parents.
Meanwhile, the Republican plan to repeal the Affordable Care Act (ACA) that passed the House last month would gut ACA provisions that kept insurance companies from gouging older customers and cut $839 billion from Medicaid over the next decade. The bill would increase private insurance rates for older people with lower incomes and leave 5.1 million people between the ages of 50 and 65 without insurance by 2026, according to the Kaiser Family Foundation. Despite the popular misconception that Medicare covers all of seniors' health care needs, millions of Americans over 65 are also enrolled in Medicaid. Elderly people would certainly suffer if the program saw deep cuts.
The proposed cuts to Medicaid are generally unpopular, and the Republican House bill has slumped in the polls. The repeal effort has recently stalled in the Senate due to deep divisions among Republicans. However, reports now indicate that Senate Majority Leader Mitch McConnell has been hammering out a compromise on Medicaid behind closed doors, with the goal of holding a vote on a Senate repeal package before a July 4 recess. A repeal is not a given, but it will take a sustained push from those who value affordable health care for low-income and working families to prevent a repeal while the GOP has a majority in Congress.
Amid this crucial resistance, a renewed push has also emerged for the creation of something different: a single-payer system. A House bill for a "Medicare for All" health plan has more co-sponsors than ever among progressive Democrats, and grassroots activists are rolling out campaigns across the country. When it comes to the issue of how to best serve elderly patients, advocates say guaranteeing health coverage for everyone would help prepare the system for an aging nation.
Medicaid and Elderly Americans
"The profit-seeking in end-of-life care is the real problem, and we could get rid of it," said Dr. Andy Coates, an assistant professor of internal medicine and psychiatry at Albany Medical College in New York and a member of Physicians for a National Health Program (PNHP), the group of doctors and reformers backing single-payer legislation in Congress.
Coates told Truthout that many patients facing terminal conditions receive "palliative care," which focuses on treating symptoms of serious illnesses, and then "hospice care" at the very end of life. Palliative specialists consider difficult questions posed by life-threatening illness: What treatments may be necessary or desirable, and what treatments would a patient want to avoid even if they could prolong life? How is the patient managing pain? What does the patient still need to get done in life before they die? Palliative specialists focus on both symptom management and psychological wellbeing.
New strategies for delivering care and reforms to Medicare under the ACA show promise for lowering costs and improving palliative and hospice care by empowering patients to take greater control of their medical decisions. Yet patients with chronic and life-threatening conditions are still bounced between providers and experience high rates of expensive and preventable hospitalizations.
While older people often juggle a number of medical expenses they must pay themselves, most also depend on the government's main health programs for at least some of their care. Medicare provides insurance to people age 65 and older, and 8 out of 10 people who died in 2014 were in the program. Beneficiaries in their last year of life accounted for 25 percent of Medicare spending that same year.
While Medicare is the largest insurer of health care provided in the last year of life, Medicaid is the nation's largest provider of long-term care services for elderly, chronically ill and disabled people. Medicare coverage tends to focus on short-term care that is medically necessary, such as providing devices after an accident or a nursing home stay for less than 100 days. Many older people in need of long-term care at home rely on Medicaid, often after spending off their personal assets on out-of-pocket costs in order to qualify. In 2011, 10 million people were enrolled in both programs, according to the Kaiser Family Foundation.The US has almost achieved "universal" coverage when it comes to end-of-life care -- but without added benefits that could support keep elderly folks from falling into poverty.
In a single-payer system, the government guarantees health care to everyone through a universal insurance program. In many countries with single-payer systems, private insurance is still available but tightly regulated, and many providers remain private. Together, Medicaid and Medicare already pay for the majority of long-term and palliative care services in the US, so some might say that the US has almost achieved "universal" coverage when it comes to end-of-life care -- but without added benefits that could support low-wage workers and keep elderly folks from falling into poverty."We're paying for a single-payer system, and we're not getting it by any stretch of the imagination."
"We're paying for a single-payer system, and we're not getting it by any stretch of the imagination," Coates said.
PNHP supports a single-payer proposal known as "Medicare for All," but that doesn't mean a transition to a single-payer system wouldn't change things for seniors covered by Medicare. The single-payer legislation currently in the House, entitled the "Expanded & Improved Medicare for All Act," would create a single, streamlined public agency that would pay health claims, rather than a profit-driven bureaucracy of competing insurance firms. "Expanded and improved" Medicare would mean that everyone, regardless of age, would be covered for all medically necessary services, including dental, vision and types of long-term care that Medicare does not currently cover.
Such a system would simplify how the nation pays for health care, and PHNP expects single payer to save hundreds of billions of dollars in administrative costs created by the insurance bureaucracy. These savings would be used to eliminate out-of-pocket costs such as copays and deductibles and provide patients with more freedom in choosing a doctor, according to PNHP.
"The country has the potential to have a great health system -- truly great," Coates said. "Instead, we have a mediocre health system and a bureaucratic mess, and everyone knows that."
Low Wages and a Growing Shortage of Caregivers
As the nation ages, more people are trying to stay out of nursing homes as long as possible, and the government now promotes home care and assisted-living models as less costly alternatives. As the ACA expanded Medicaid, the Obama administration offered states waivers to spend Medicaid dollars on "home and community-based" services for those in need of long-term and palliative care. These programs allow families to hire home-care workers and nursing assistants or support themselves while caring for loved ones. This support is crucial for members of working families who often struggle to care for elderly and disabled relatives while maintaining low-wage jobs.
"Right now, end-of-life, physical care for patients who can't get out of bed is done by the immediate women family members, who are often unpaid and financially devastated," Coates said of working families. "If you are up all night caring for your dad and you are too tired to go to work, then you are going to lose your job."
Physicians and policymakers alike say that using Medicaid waivers to shift care from expensive nursing facilities to home and community settings leads to better health outcomes, saves public resources and helps struggling families. The need for these waivers is expected to grow as the population ages, but the House bill to repeal the ACA would put these programs on the chopping block as states grapple with federal funding cuts.
Medicaid supports aging populations in another way: Many low-wage workers who provide long-term and palliative health services depend on the program for their own health care, according to Josephine Kalipeni, director of policy at Caring Across Generations, a think tank backed by labor groups that focuses on aging patients and their caregivers.
"When we think about aging baby boomers and people with disabilities who are able to be at home, a lot of that is being supported by the fact that a lot working people and home-care workers rely on Medicaid to get their health care," Kalipeni said.
In fact, experts say a growing labor shortage is a top concern. Nursing assistants, personal care aides and home-care workers who care for the elderly and disabled are leaving the industry in droves due to poor working conditions and extremely low wages. Meanwhile, demand for this labor is growing and will continue to grow as baby boomers age, medical advances allow people to live longer, and policy shifts put a greater emphasis on providing end-of-life care in domestic and community settings rather than in expensive nursing facilities.
"We are seeing shortages all around the country," said Robert Espinoza, vice president of policy at the Paraprofessional Healthcare Institute (PHI), a group that tracks workers who spend the most time caring for elderly people and those with chronic illnesses and disabilities.
Espinoza said a lack of government data on this workforce makes it difficult to quantify just how bad this shortage is going to get and which parts of the country will be hit the hardest. What we do know is that these workers are most often women, and the number of working-age women willing to do the job is not keeping pace with the aging population. About 40 to 60 percent will leave their jobs within 90 days, most often citing low wages, a lack of career opportunities and difficult supervisors. Espinoza said workers often leave for higher paying but less arduous jobs in food service or retail, particularly in rural areas where the number of health care providers is already slim.
Home-care workers assist patients with intimate daily tasks, such as eating and bathing. Many also provide both physical and emotional comfort to the sick and dying, a form of emotional labor that's hard to put a price on. It's one of the fastest growing occupations in the country, but wages have stagnated in the past decade, with workers making a median wage of $10.11 an hour adjusted to inflation, according to PHI. The work is often part-time, with workers earning an average of $13,000 and receiving few benefits from employers. As a result, 1 in 4 home-care workers live below the poverty line and rely on public assistance like Medicaid.
Wages aren't much better for the nursing assistants, who often work part time and earn a median income of $19,000 a year.
Government insurance programs keep these workers and their patients afloat. Medicare and Medicaid are the major public programs that provide about 72 percent of the home-care industry's earnings and 73 percent of the nursing home industry's $116 billion in annual revenue, PHI reports. In addition, Kalipeni said Medicaid relieves pressure from the Medicare system by helping low-income people stay healthier in the years before they qualify. So, what would happen if the GOP were to succeed in making drastic cuts to Medicaid?
Under the House bill, caps on Medicaid spending would be placed on states by 2020, forcing states to start making their own cuts to balance the books. States will focus remaining funding on the Medicaid services they are required by law to cover; home and community-based services and the waivers behind them are optional. States already limit funding for these services due to budget constraints, and they are likely to be dropped soon after federal Medicaid cuts hit state level, according to the Center on Budget and Policy Priorities.
"[The House bill] provides more flexibility of what states can do, but way less resources to be innovative and productive … and that just doesn't make sense," Kalipeni said.
Kalipeni has spent much of her career working on the ACA. She does not believe it's a perfect law, but says it's much better than the Republican proposal. Unlike the House bill, the ACA contains provisions to hire and train the workers needed to meet increasing demand for health care, particularly in poor and rural areas. She said the ACA did not go far enough with this and other reforms, but that it highlighted the importance of thinking ahead about the health care workforce.
"We want to ensure that the need to recruit and retain a well-paid workforce [is] an intentional component of any of the working family policies moving forward," Kalipeni said. "This can't be kicked down the line or moving on a parallel path. This has to be built in. Additionally, as this country continues to rely heavily on family caregivers, supports for family caregiving have to be seen as a critical part of any changes to our health care system."
Seniors and the Single-Payer Future
The ACA is far from perfect, the House bill to repeal it is unpopular and Senate Republicans are starting to doubt whether they can agree on their own overhaul package anytime soon. Out of this policy void has come the renewed interest in a single-payer system. In addition to the House bill to establish Medicare for All, with its record 112 co-sponsors, single-payer legislation is on the move in New York and California. After some prodding from reporters in his home state of Vermont, Sen. Bernie Sanders, who ran for president on a single-payer platform, introduced similar legislation in the Senate last month.
Kalipeni said a move toward a single-payer or another type of universal system that could streamline services and increase spending on wages would be a powerful step forward for both elderly patients and their caregivers.
"We are one of the few developing countries that is behind in providing universal care in a way that increases access, shares costs and meets people's needs," Kalipeni said. "Streamlining health care in this way could help manage costs and improve people's user experience with health care systems."
Voters are catching on. In April, a Morning Consult/Politico poll taken found that more likely voters supported single payer than opposed the idea, including 37 percent of Trump voters. In January, before the Republican repeal proposals filled Capitol Hill with talk of cuts and millions losing health coverage, a Pew Research poll found that 60 percent of voters agreed that the government should be "responsible for ensuring health care coverage for all Americans."
Advocates say much of the support for single payer comes down to the bottom line: We pay more for health care in the US than other industrialized countries, but have poorer health outcomes and shorter lifespans.There are so many "middle men" and incentives to cut corners at the expense of patients that it turns the act of dying into a "profit-making moment."
Coates is particularly concerned about private hospice providers who are incentivized to spend less than they receive from Medicaid and Medicare in order to turn a profit, particularly since the ACA extended Medicare's hospice benefits. Currently, he said, there are so many "middle men" and incentives to cut corners at the expense of patients that it turns the act of dying into a "profit-making moment." As private businesses, these providers don't have to share their finances with the public. Under a single-payer system, there would be a political incentive to require private hospice providers to open their books in order to receive public funds.
Coates said some people believe a single-payer system would allow the government to make their health care decisions for them, but that's simply not true. In reality, the government's single-payer office would be in charge of protecting a patient's right to privacy and autonomy while holding health care providers accountable for the services it's paying for.
"We should have a system that provides dignity, and if you never have control of the money, then how are you ever going to transform it?" Coates said.
The Republican majority in Congress is sure to keep single-payer proposals stuck in committee, but advocates say now is the time to push establishment Democrats to embrace single payer as a bold alternative to the ACA and Republican austerity.
Coates said that most people already support the ideas behind single payer, and politicians in both parties are out of step. According to polls, most people agree that when someone suffers from a serious medical condition, the resources for treatment should be available to them, not locked behind sky-high premiums and out-of-pocket costs.
"Even well-to-do Trump supporters would still say that, if a kid has leukemia, then he should receive the best care this country has to offer," Coates said.
The same goes for the elderly. As the shortcomings of the Medicare system illustrate, simply installing a single-payer system for a large group of people is not enough unless that system covers everything under the health care umbrella. A meaningful single-payer plan would include everything that Medicare already covers while meeting the rest of the needs that come with aging, including those currently supported by Medicaid, out-of-pocket costs and family members.
To achieve a high quality of care under such a system, care workers must be fairly compensated. This is where the movement for health care as a human right intersects with so many others. A majority of home care workers are women of color, and many come from immigrant families. Kalipeni said that both the Fight for $15 campaign to raise the minimum wage, as well as the movements for racial justice and immigrant rights, are central to the health care fight, because they're focused on improving conditions for the workers who will be caring for baby boomers at the end of their lives. If these workers can receive proper wages, benefits and training, then they can keep aging patients healthy and out of hospice, saving more health care dollars in the future -- and saving lives.
When we look at health care reform through the lens of dying and death, suddenly our movements -- and our very lives -- become inextricably intertwined.
This story was originally published by The Revelator.
Low-income families in the United States could be left out in the cold -- or in the brutal heat -- by President Trump's proposed 2018 budget.
A little-noticed provision of Trump's so-called "Taxpayer First Budget" would eliminate funding for the Low-Income Home Energy Assistance Program (LIHEAP), which has assisted millions of families annually with their heating and cooling costs since 1981. The $3.09 billion dollar program provides block grants to states, territories and tribal organizations, which then distribute funding to constituents in need.
Those families already struggle with their heating and cooling bills, which is why the program was created in the first place. According to a report issued earlier this year by the NAACP, low-income and African-American families disproportionately suffer overly high energy burdens. Not only do utility rates take up an overly large portion of expenses for these households, the report details how some utilities routinely shut off service to customers who have trouble keeping up with their bills. Many states offer little to no protection to get those utilities turned back on, even during the dangerous heat of summer or below-freezing winter temperatures.
According to the NAACP:
• 8 states have no medical protection policies on affecting disconnection of services;
• 11 states have no disconnection limitation polices
• 14 states have no date-based protection policies, which set specific dates of when customers cannot, without due diligence, be disconnected from a utility service
• 28 states have no temperature-based policies -- meaning, regardless of how cold it becomes, utilities can be shut-off
• 11 states have no disconnection limitations
• And 36 states have reconnection fees, requiring customers to pay even more to get their service turned back on.
The NAACP calculates that the elimination of the energy assistance program would impact over one million African Americans and nearly 7 million Americans in total. They also estimate that thousands of people a year would face health risks without the program -- a number that would only increase in the face of climate change.
"As summertime temperatures increase, and heat waves and droughts become more frequent, people with fewer means are increasingly vulnerable," says Marcus Franklin, environmental and climate justice program specialist with the NAACP. "Heat is already the number-one weather-related killer in the US, triggering asthma attacks, heart attacks and other serious health impacts. The fact that states across the nation do not have seasonal protections in place should be frightening for socially vulnerable communities."
About half of the program's current funding goes toward winter heating, but Franklin says he is particularly worries about the need for cooling during hot summers. Specifically, the urban heat island effect, which can cause city temperatures to rise as much as 22 degrees above normal, will be hard on low-income city populations. "The hottest parts of the country, including Texas, the Southwest and Florida, have already experienced large increases in extreme heat days, including days over 90, 95 and 100 degrees," he says. "Extreme heat paired with rising humidity levels make blistering hot days more dangerous." These areas, which include several of the fastest-growing cities in the country according to the US Census Bureau, are projected to encounter dangerous increases in heat in the coming decades. "Heat-related deaths due to urban extreme heat are common in other regions as well, notably in large cities like Los Angeles and New York. Air conditioning is a luxury many cannot afford."
Franklin says the release of their report in March, which received surprisingly little media attention, still generated a lot of outrage among the organization's members and partners. He says one of the most common comments they received about the report "is that it articulates a vision for an energy future that society can strive toward: energy access as a basic right."
The NAACP's full report on this issue breaks down existing utility shut-off protections -- or lack of them -- state by state, while also providing a roadmap for working with utilities and regulators to improve the situation. Franklin says gathering more information and personal stories about utility shut-offs will help to secure a brighter, and safer, future for all customers around the country regardless of the political climate.
This year's legislative season saw a strong push in the states from right-wing groups, bankrolled by the Koch brothers and other ultra-conservative billionaires, hoping to convene a national constitutional convention in order to inject rigid fiscal constraints into our country's founding document. Advocates of a federal "balanced budget amendment" (BBA) picked up two more states, Wyoming and Arizona, in their drive to win the 34 resolutions needed to bypass Congress and convene a convention to propose changes to the US Constitution.
That momentum, however, was blunted by surprisingly successful campaigns to rescind convention calls in three states, New Mexico, Maryland, and Nevada. As a result, BBA proponents now claim 27 states in their column, down from 28 at the beginning of the year.
Two steps forward and three steps back... from the brink of a political experiment untried since 1787.
Under Article V of the Constitution, amendments can be proposed either by two-thirds of both the House and Senate, or through a convention called for by two-thirds of state legislatures (currently 34 states). After adoption at a convention, any amendment must be ratified by three-fourths of the states (currently 38 states) before it can become part of the Constitution.
While amendments proposed by Congress have been adopted 17 times since the Constitution's ratification, a constitutional convention has never been called. Critics of this approach, from the Left and the Right, are concerned about how such a convention would play out in this era of massive political spending by billionaires and corporations, especially since there is nothing in Article V limiting the scope of a convention once called.
BBA Momentum Stalls
Backers of a balanced budget amendment convention set their sights on at least seven red states this year, but of those, Wisconsin is the only one still in play, with an Assembly vote scheduled for June 14. Growing opposition resulted in the hard-fought defeat of a BBA resolution in Idaho and the tabling of a similar measure in Kentucky.
More than 200 organizations, including the Center for Media and Democracy, signed onto a letter in April 2017 denouncing an Article V convention at this time as "a dangerous threat to the US Constitution, our democracy, and our civil rights and liberties."
In addition, three legislatures rescinded prior convention calls, following Delaware's lead last year. As a result, the number of states with BBA convention calls has dropped by one; passage in Wisconsin would make the year a wash.
The groups behind the convention drive are disappointed but undeterred, and have targeted at least seven states for 2018, (Kentucky, Maine, Minnesota, Montana, South Carolina, Virginia, and Washington).
"With tremendous momentum led by ALEC and other arch-conservative organizations, we started 2017 expecting to see Article V resolutions pass in many states," said Common Cause campaign strategist Jay Riestenberg. "Instead, in this dangerous period of divisive politics, we saw bi-partisan cooperation in several states to protect the Constitution."
"While three states took action to protect our Constitution by rescinding Article V convention resolutions, wealthy special interest groups are still dangerously close to calling a convention that would put everyone's constitutional rights and protections up for grabs," Riestenberg said.
All of the bills are closely tailored to model measures being promoted by the Koch-backed American Legislative Exchange Council (ALEC) and Balanced Budget Amendment Task Force. Funded and controlled by large corporations, including Koch Industries, ExxonMobil, telecom, and tobacco companies, ALEC has supported a BBA since 1995 and renewed its push for a constitutional convention in recent years, publishing an Article V convention handbook for legislators and hosting numerous strategy sessions.
BBA advocates cite "common sense" concerns about "fiscal responsibility," but the rhetoric masks the outright hostility that the Kochs and other billionaire backers have for key federal programs like Social Security, Medicare and Medicaid, and for the regulatory infrastructure that protects consumers and the environment. Prominent economists warn that such an austerity amendment -- which would constrain discretionary spending but not tax giveaways for corporations and the wealthy -- would have catastrophic results during economic downturns and cripple the federal government's ability to aid states as they deal with the severe impacts of climate change.
More Radical Measures Gain Momentum
Meanwhile, a faction of the Article V convention crowd seeking a much more radical rewrite of the Constitution made significant gains in 2017. The "Convention of States" (COS) project, run by the Texas-based Citizens for Self Governance, introduced wide-ranging resolutions calling for a broad convention to limit the powers of the federal government in 24 states and won passage in four, Arizona, Missouri, North Dakota, and Texas.
COS, whose budget more than tripled between 2011 and 2015 to $5.7 million, now has a total of 12 states behind its more unlikely, but more dangerous, approach. The group, founded by Tea Party Patriots founder Mark Meckler and Koch-tied dark money man Eric O'Keefe, has received major support from the Koch-linked Donors Trust and backing from ALEC, which has adopted COS's proposal as a "model" bill. It seeks a constitutional convention to pass any number of amendments designed to limit the powers of the federal government, adopt term limits, and allow states to opt-out of regulations and even Supreme Court decisions they do not like.
The COS strategy, if successful, would radically revise the Constitution's structure of state and federal power sharing in a way that goes to the heart of what it means to be "united states." Most of the states that have passed Convention of State resolutions are in the deep south, prompting some critics to call it the "New Confederacy."
Responding to earlier presidential pressure, the Federal Reserve is expected to raise interest rates this week for the third time since November, from a fed funds target of 1% to 1.25%. But as noted in The Guardian in a March 2017 article titled "Trump Is Set to Win the Battle on Interest Rates, but US Economy Will Pay the Price":
An increase in the base rate, however small, will tighten the screw on younger voters and some of the poorest communities who voted for him and rely on credit to get by.
More importantly for his economic programme, higher interest rates in the US will act like a honeypot for foreign investors . ... [S]ucking in foreign cash has a price and that is an expensive dollar and worsening trade balance. ... It might undermine his call for the repatriation of factories to the rust-belt states if goods cost 10% or 20% more to export.
In its Global Financial Stability report in April, the International Monetary Fund issued another dire warning: projected interest rises could throw 22% of US corporations into default. As noted on Zero Hedge the same month, "perhaps it was this that Gary Cohn explained to Donald Trump ahead of the president's recent interview with the WSJ in which he admitted that he suddenly prefers lower interest costs."
But the Fed was undeterred and is going full steam ahead. Besides raising the fed funds rate to a target of 3.5% by 2020, it is planning to unwind its massive federal securities holdings beginning as early as September. Raising interest rates benefits financial institutions, due to a rise in interest on their excess reserves and net interest margins (the difference between what they charge and what they pay to depositors). But borrowing costs for everyone else will go up (rates on student loans are being raised in July), and the hardest hit will be the federal government itself. According to a report by Deloitte University Press republished in the Wall Street Journal in September 2016, the government's interest bill is expected to triple, from $255 billion in 2016 to $830 billion in 2026.
The Fed returns the interest it receives to the Treasury after deducting its costs. That means that if, rather than dumping its federal securities onto the market, it were to use its quantitative easing tool to move the whole federal debt onto its own balance sheet, the government could save $830 billion in interest annually -- nearly enough to fund the president's trillion dollar infrastructure plan every year, without raising taxes or privatizing public assets.
That is not a pie-in-the-sky idea. Japan is actually doing it, without triggering inflation. As noted by fund manager Eric Lonergan in a February 2017 article, "The Bank of Japan is in the process of owning most of the outstanding government debt of Japan (it currently owns around 40%)." Forty percent of the US national debt would be $8 trillion, three times the amount of federal securities the Fed holds now as a result of quantitative easing. Yet the Bank of Japan, which is actually trying to generate some inflation, cannot get the CPI above 0.2 percent.
The Hazards of Operating on the Wrong Model
The Deloitte report asks:
Since the anticipated impact of higher interest rates is slower growth, the question becomes: why would the Fed purposely act to slow the economy? We see at least two reasons. First, the Fed needs to raise rates so that it has room to lower them when the next recession occurs. And second, by acting early, the Fed likely hopes to choke off inflationary pressure before it starts to build.
Rates need to be raised so that the recession this policy will trigger can be corrected by lowering them again -- really? And what inflation? The Consumer Price Index has not even hit the Fed's 2% target rate. Historically, when interest rates have been raised in periods of tepid growth, the result has been to trigger a recession. So why raise them? As observed in a June 2 editorial in The Financial Times titled "The Needless Urge for Higher Borrowing Costs":
In this context, the apparent determination of the Fed in particular to press on with interest rate rises looks a little peculiar. Having created expectations that it was likely to tighten policy with three quarter-point increases over the course of 2017, the Fed is acting more like a party to a contract that feels the need to honour its terms, than a central bank that takes the data as it finds them. [Emphasis added.]
In the six months since President Trump was elected, the Fed has pressed on with two rate hikes and is proceeding with a third, evidently just because it said it would. Impatient bond investors are complaining that it has found one excuse after another to postpone the "normalization" it promised when market conditions "stabilized;" and in his presidential campaign, Donald Trump attacked Janet Yellen personally for keeping rates low, putting her career in jeopardy. She has now gotten with the program, evidently to restore the Fed's waning credibility and save her job. But the question is, why did the Fed promise these normalization measures in the first place? As then-Chairman Ben Bernanke explained its "exit strategy" in 2009:
At some point, ... as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road. ... [B]anks currently hold large amounts of excess reserves at the Federal Reserve. As the economy recovers, banks could find it profitable to be more aggressive in lending out their reserves, which in turn would produce faster growth in broader money and credit measures and, ultimately, lead to inflation pressures.
The Fed evidently believes that the central bank needs to tighten monetary policy (raise interest rates and sell its bond holdings back into the market) because the massive "excess reserves" held by the banks (currently ringing in at $2.2 trillion) will otherwise be lent into the economy, expanding the money supply and triggering hyperinflation. Which, as David Stockman puts it, shows just how clueless even the world's most powerful central bankers can be in matters of banking and finance...
Banks Don't Lend Their Reserves
There need be no fear that banks will dump their excess reserves into the market and create "inflation pressures," because banks don't lend their reserves to their commercial borrowers. They don't because they can't'. The only thing that can be done with money in a bank's reserve account is to clear checks or lend reserves to another bank. Reserves never leave the reserve system, which is simply a clearing mechanism set up by the central bank to facilitate trade among banks. Technically, dollars leave the system when a depositor pulls money out of the bank in cash; but as soon the money is spent and redeposited, these Federal Reserve Notes go back into the banking system and again become reserves.
Not only do banks not lend their reserves commercially, but they do not lend their deposits. Banks create deposits when they make loans. As researchers at the Bank of England have acknowledged, 97 percent of the UK money supply is created in this way; and US figures are similar. Banks do not need reserves or deposits to make loans; and since they are now flooded with reserves, they have little incentive to pay interest on the deposits of "savers." If they do not have sufficient incoming deposits at the end of the business day to balance their outgoing checks, they can borrow overnight in the fed funds market, where banks lend reserves to each other.
At least they used to do this. But since the Fed began paying Interest on Excess Reserves (IOER) in 2008, they have largely quit lending their reserves to each other. They are just pocketing the IOER. If they need funds, they can borrow more cheaply from the shadow banking system -- the Federal Home Loan Banks (which are not eligible for IOER) or the repo market.
So why is the Fed paying interest on excess reserves? Because with the system awash in $2.2 trillion in reserves, it can no longer manipulate its target fed funds rate by making reserves more scarce, pushing up their price. So now the Fed raises the fed funds rate by raising the interest it pays on reserves, setting a floor on the rate at which banks are willing to lend to each other -- since why lend for less when you can get 1.25% from the Fed?
That is the theory, but the practical effect has been to kill the fed funds market. The Fed has therefore implemented a new policy tool: it is "selling" (actually lending) its securities short-term in the "reverse repo" market. The effect is to drive up the banks' cost of borrowing in that market; and when this cost is passed on to commercial borrowers, market rates are driven up.
Meanwhile, the Fed is paying 1% (soon to be 1.25%) on $2.2 trillion in excess reserves. At 1%, that works out to $22 billion annually. At 1.25%, it's $27.5 billion; and at 3.5% by 2020, it will be $77 billion, most of it going to Wall Street megabanks. This tab is ultimately picked up by the taxpayers, since the Fed returns its profits to the government after deducting its costs, and IOER is included in its costs. Among other possibilities, an extra $22 billion annually accruing to the federal government would be enough to end homelessness in the United States. Instead, it has become welfare for those Wall Street banks that largely own the New York Fed, the largest and most powerful of the twelve branches of the Federal Reserve.
Paying IOER is totally unnecessary to prevent inflation, as evidenced again by the case of Japan, where the Bank of Japan is actually trying to fan inflation and is now charging banks 0.1% rather than paying them on their excess reserves. Yet the inflation rate refuses to rise above 0.2%.
Banks cannot lend their reserves commercially and do not need to be induced not to lend them. The Fed's decision to raise rates by increasing IOER just increases public and private sector borrowing costs, slows the economy, threatens to bankrupt businesses and consumers, and gives another massive subsidy to Wall Street.
Over the past century, generations of young people have turned their backs on city life to embrace small-scale farming and back-to-the-land ideals. The exact circumstances for each generation's return have varied: the Great Depression in the 1930s, the Vietnam War in the '60s and '70s, and, more recently, the loss of ecosystems and biodiversity to industrial agriculture and climate change.
Each generation has had one common desire: to live a more honest, ethical life of self-sufficiency and oneness with nature.
Young farmers today face serious structural obstacles: access to affordable land, a steep (and often self-financed) learning curve, debilitating student loans, and lack of access to health care.
But three back-to-the-land farmers managed to succeed in a fickle vocation that seems to demand equal parts skill, determination, and luck. What choices did they make, and are their experiences instructive for struggling young farmers today?
Jean-Martin Fortier: Standing on the Shoulders of Giants
In the winter of 2001, two freshly minted graduates of McGill University's School of Environment, Jean-Martin Fortier and Maude-Hélène Desroches (then 22 and 23, respectively), embarked on an eco-exploration of the Americas. They picked coffee beans on a fair trade farm in Mexico and built yurts at an off-grid community in New Mexico. But it wasn't until they started working at a small organic farm near Santa Fe, New Mexico, that they decided they wanted to commit their lives to small-scale organic agriculture.
Several years later, as they were expecting their first child, Fortier and Desroches were living in a tipi and leasing one-third of an acre, where they eventually launched a 30-member CSA and saved money to buy the 2-acre plot that became their farm, Les Jardins de la Grelinette, in Saint-Armand, Quebec.
Fortier wrote to Eliot Coleman, then in his 60s, who was a pioneer of organic farming and author of The New Organic Grower: A Master's Manual of Tools and Techniques for the Home and Market Gardener in 1989.
Coleman's was the first farming manual Fortier and Desroches picked up, and Fortier wanted to thank the older farmer for his teachings and ask permission to visit his Four Season Farm in Harborside, Maine.
"I probably read the book 40 times, always trying to figure it out, read between the lines," Fortier recalled, visibly moved by the recollection. "I'm sorry. I get emotional about it, but it was the only book that described what we were trying to do."
Building on Coleman's farming techniques, Fortier published his own how-to guide in 2012 (and its English language edition, The Market Gardener: A Successful Grower's Handbook for Small-Scale Organic Farming , in 2014). It has been a huge success: More than 100,000 copies have been sold worldwide, and it continues to be published in other languages, including German, Italian, and Dutch. In 2015, it won the American Horticultural Society book award, a coveted prize.
As Mother Earth News said, "If you're a vegetable grower and you haven't yet heard of small-scale agriculture advocate and author Jean-Martin Fortier, you need to look him up."
To such farmers, Fortier's message in Market Gardener is enticing: "A well-established, smoothly running market garden with good sales outlets can bring in $60,000 to $100,000 per acre annually in diverse vegetable crops. That's with a profit margin of over 40 percent." (For context, the average CSA farmer brings in less than $40,000 per acre of vegetables.)
Like his mentor Coleman, Fortier assured readers that they too could run a profitable farm and have summers off to travel and learn -- in short, to live an ethical, good life.
"Are you just making money, or making a difference?" he asked rhetorically. "We're fortunate because we're doing both."
Helen and Scott Nearing: Mentoring the Mentor
Just as Fortier looked to Coleman as a role model, Coleman looked to an earlier generation of teachers to show him the way. Thirty-four years earlier, he had made the pilgrimage to see the renegade farmers whose 1954 book inspired him.
In Living the Good Life: How to Live Sanely and Simply in a Troubled World, Helen and Scott Nearing told the story of their two-decade adventure of subsistence farming. It became the hippie handbook of the day. Coleman fell in love with the romance of Living the Good Life, a sort of Walden for a generation disgusted by the Vietnam War and the militarism it stood for.
"They made farming sound adventurous," he said.
Scott Nearing was a pacifist, vegetarian, and socialist. The brilliant economist had been dismissed from the faculty of the University of Pennsylvania in 1915 for his outspoken stance against child labor and vested corporate interests. Homesteading for him was a way to drop out of the "price-profit" economy and the "blood culture" of meat-eating and create a completely self-sufficient and nonviolent homestead.
Perhaps Nearing saw something of himself in Coleman, who was a handsome, confident Williams College graduate with piercing blue eyes and a manic energy level that Coleman himself says "today would probably have me on an intravenous drip of Ritalin."
His visits to '60s-era New Hampshire health food stores introduced him to Living the Good Life. The book inspired him and his then-wife, Sue, a dreamy descendent of Mayflower folk, to pilgrimage to Harborside, Maine, in 1968, where the Nearings had relocated 16 years earlier.
So charmed were Scott and Helen -- then 85 and 68, respectively -- by this young couple, that later that same year they sold them 60 acres of fallow land. Scott's socialist beliefs and his horror of the "trap of riches" made the thought of profiting from a sale abhorrent.
"We offered $3,000," Coleman recalled. "Scott said $500 and Helen said $2,000, so we settled on that." It worked out to roughly the same $33 per acre the Nearings had paid in 1952.
The restless Coleman cleared his rock-filled land by hand and threw himself into farming, making off-hours trips to the library to study the agricultural practices of other ages and cultures.
In 1973, the first year Coleman turned a profit on his 1 1/3 acres, he set his sights on touring organic farms in Europe to bring back the secrets of "biological agriculture," as organics were known there. Funded by a grant from the Nearings, he made his first visit in 1974 to Europe, where he discovered that small-scale organic farming and machinery were leagues ahead of the US.
Importing European Market Gardening Techniques
In France, Coleman met Louis Savier, who farmed a little more than 1 hectare (about 2.5 acres) just south of Paris. Coleman describes the French farmer as "a surviving example of the classic French system of intensive market gardening, with lots of compost, cold frames, and greenhouses," and he brought those techniques back to Maine, improving on them.
Soon, following the oil shock of the 1970s and the disillusionment over Watergate, Coleman began to attract his own stream of apprentices. Driven back to the land, they joined him in discussions about agriculture and politics and farmed in the nude, high on the beauty of Maine and the idealism of their endeavors. Coleman went on to distill his practical knowledge in his 1989 book, The New Organic Grower, and three more books.
When Idealism and Know-How Aren't Enough
Despite success stories like Coleman's and Fortier's, many of today's young farmers understand how unforgiving it is to make a living through farming. They approach the romanticism of it with their eyebrows cocked, just as they did in Coleman's time.
Lindsey Lusher Shute, 38, is the executive director of the National Young Farmers Coalition. After six years of highly successful farming on 25 rented acres in the Hudson Valley, Shute and her husband, Ben Shute, realized they had no long-term security, and that every farm in the area they might want to buy was priced over a million dollars. Though she calls Coleman and Fortier "inspiring" to NYFC members and "the spark that gets them going," she says that "structural problems in farming are not allowing a new generation of farms to thrive," citing the high cost of land, student debt, and out-of-reach health insurance premiums.
Though the young farmers within her network wield social media to their advantage and benefit from a dedicated customer base that is invested in sourcing its food, that's still not enough, says Shute.
"Many of our farmers are essentially retiring in their early 30s," she explained. They think about starting a family and saving for retirement and realize that farm income is grossly inadequate for meeting their life goals.
While the NYFC doesn't have any hard numbers on farmer retention rate, Shute said, the organization is now analyzing data from a survey of 4,700 young farmers from across the country. Results will be more detailed than with previous surveys, including data on the reasons participants chose to leave farming.
As older farmers retire and the country faces a serious shortage of farmers, the NYFC is lobbying for a federal student loan forgiveness program and working to make farmland more affordable through improved federal and state laws governing conservation easements. (Shute and her husband were able to buy 70 acres in 2012 with the help of a local land trust.)
Helpful Traits and Techniques
The obstacles the NYFC is fighting to eradicate are real. Yet it is also instructive to examine what helped the Nearings, Coleman, and Fortier and Desroches succeed in eras with different challenges; Coleman, for example, wishes he had even a fraction of the instruction and tools that are now available to small-scale farmers.
In the Nearings' case, part of their success had to do with their uncommonly ascetic natures and their zealous (perhaps even sanctimonious) embrace of work. Using only hand tools, they erected nine stone buildings, all while keeping up their farming, writing, and lecturing and research trips. Nearing wrote, "Human beings can be divided into two groups: those who yearn for a comfortable existence and those who revel in a hard life of decision and struggle."
The Nearings were also meticulously organized strategic planners, drafting a 10-year plan "as though we were handling a large-scale economic project." They even created a color-coded system for storing tools.
Coleman and Fortier too place a high value on organization, planning, close observation, and record keeping. In The New Organic Gardener, Coleman details his process of using a 3-by-5-inch index card for each crop type, shuffling them to reflect ideal crop rotation sequence. In The Market Gardener, Fortier supplies a map suggesting the most efficient and ergonomic layout of a market garden, and thanks his businessman father for teaching him at a young age "the importance of being well-organized."
That market farming has a high failure rate, added Coleman, is no different from any type of small-business startup. "Ninety-five percent of small business startups fail in five years," he pointed out.
Like any endeavor fraught with uncertainty, small-scale organic farming requires fearlessness and a certain leap of faith to ensure success. It requires the business skills of a corporate CEO, as Coleman likes to say, and the spiritual forbearance of a monk.
In the face of such steep odds, the existence of organizations like NYFC and the teachings of the Nearings, Coleman, and Fortier are crucial -- they propagate the urge to return to the land, to quest for an ethical, "good" life.